Labour accused of hypocrisy after blocking measures to crackdown on £8.6billion tax avoidance

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Labour has been accused of hypocrisy after it blocked a planned crackdown on tax avoidance which would have raised £8.6billion for the Treasury.

Jeremy Corbyn's party forced three key measures to be dropped from the Government's finance bill earlier this week, including new rules to stop companies from shifting losses overseas to avoid corporation tax.

The chief secretary to the Treasury branded Labour "hypocrites" after the party also refused to support new fines for accountants who help their clients dodge tax and a plan to close non-dom loopholes which would have saved £1.6billion by 2022.

The plans were contained in the finance bill which was passed by MPs this week ahead of the general election.

Theresa MayCredit:
AFP

But Conservative sources claim Labour threatened to scrap the bill entirely by blocking it from passing unless the three key measures were removed.

As a result the Tories were forced to cut the tax raising plans in order to get the rest of the bill through the Commons before time ran out.

A source said: "Labour demanded the measures be stripped from the Finance Bill during discussions to agree which Government Bills could become law before Parliament rose ahead of the General Election – a process known as “wash up”.

"Despite claiming to support the measures, Jeremy Corbyn’s chaotic party said Parliament had not been given enough time to support them – even though the Commons debate on the package finished early."

The plans would crack down on big companies avoiding corporation taxCredit:
Bloomberg

If Theresa May is returned as Prime Minister after the June vote the measures will be brought back in the next session of parliament, but MPs have warned Labour's decision has put over £8billion of extra tax at risk.

David Gauke said: “Jeremy Corbyn’s weak and floundering Labour Party have again shown what a risk they pose to our economy by blocking new measures to tackle tax avoidance and clamp-down on non-doms using tax loopholes.

“Corbyn and his team claim to support our crackdown on tax dodging but are so chaotic that they stopped it from happening. It’s shows they are either incompetent of hypocrites.

“Voters have a clear choice between the strong and stable leadership of Theresa May to lock in the economic progress we have made together, or fewer jobs and more debt under Jeremy Corbyn and his coalition of chaos.”

David GaukeCredit:
PA

The measures to clamp down on businesses that move losses offshore in order to avoid corporation tax were set to raise £6.9billion over the next five years.

Fines for accountants would have added a further £115million while closing loopholes for non-doms, people who claim to live outside the UK for tax purposes, would have brought in £1.6billion for the taxpayer.

It came as new figures showed that despite the Government's decision to cut the rate of corporation tax levied on businesses in the UK receipts have increased from £34billion in 2011-12 to £50billion this year.

This is despite a cut in the rate from 28 per cent to 20 per cent over the same time period.

Mr Corbyn has said he would increase corporation taxCredit:
PA

The Centre for Policy Studies research highlighted concerns about how Labour will fund its manifesto pledges after promising to use money from increasing the corporation tax rate to pay for at least 12 policies.

The CPS said: "Labour’s plans on corporation tax and their associated pledges, on the other hand, would undermine the UK’s competitiveness and leave a series of unfunded spending commitments."

Mr Gauke added: "This report exposes how Jeremy Corbyn’s sums don’t add up and would leave a £10 billion black hole which we will all pay for.

“Leaving Jeremy Corbyn in charge of our economy is a risk families can’t afford - his coalition of chaos would result in higher taxes, more debt, and more waste.

“The only way to secure our growing economy is with the strong and stable leadership of the Theresa May and the Conservatives.”

The Labour leaderCredit:
PA

Mr Corbyn will make a speech about leadership in East London on Saturday, where he will call on young voters not to miss the election.

He will warn: "Apathy and resignation will secure them [the Conservatives] seats on election day."

It came as Labour was forced to promise to defend the Falklands after Mr Corbyn previously hinted that he would be willing to strike an "accommodation" with Argentina about their future.

The comments left residents of the British territory furious but yesterday Emily Thornberry, Labour's shadow foreign secretary, vowed a commitment to their continued protection would be included in the party's manifesto.